The Star Entertainment Group, an Australian casino operator, has been hit with a hefty A$260 million fine by the Federal Court due to violations of anti-money laundering (AML) and counter-terrorism financing (CTF) laws. The court's ruling was announced on Wednesday, revealing the company’s failure to maintain a compliant AML/CTF program and effectively monitor its customers for potential terrorism financing risks over a six-year period from November 2016 to November 2022.
Under the court's order, The Star Sydney is set to pay A$195 million, with A$48.75 million due by November 25. The Star Queensland faces a payment of A$65 million, which includes A$16.25 million to be paid by the same date.
The investigation, initiated by the Australian Transaction Reports and Analysis Centre (AUSTRAC), has been ongoing since November 2022. AUSTRAC CEO Brendan Thomas stated that the court found The Star not only neglected essential checks but also prioritized profit over compliance on a grand scale. The Star allegedly allowed high-risk customers to gamble without verifying the source of their funds and failed to impose necessary oversight over a private casino area. Furthermore, the operator continued to pursue customers previously excluded from gambling in another state and permitted junkets to engage in suspicious activities, despite known risks.
The court ruled that The Star's compliance failures under the AML/CTF Act have obstructed AUSTRAC and law enforcement's ability to trace illicit funds, leading to missed opportunities to prevent criminal activities and seize related proceeds. Notably, The Star exhibited significant deficiencies in its treatment of high-risk customers, which included inadequate verification of customer data, insufficient background checks, and poor monitoring of gambling activities.
These shortcomings resulted in heightened money laundering risks due to a lack of transparency surrounding the source of funding, reliance on third-party transactions, and cash payments without identifiable third-party information. Justice Moore indicated that The Star profited from funds that were likely linked to criminal activity, estimating junket revenue at over A$1.4 billion, with profits exceeding A$100 million in pre-COVID years. Additionally, The Star's own records suggest that revenue from high-risk customers during the specified period was approximately A$1.33 billion, underscoring the profitability of a non-compliant approach to AML/CTF obligations.
As of now, The Star Entertainment has refrained from issuing any public comments regarding the court's judgment.
